Above photo by Gillian Laub—Contour by Getty Images

BUSINESS
THE TRUMP WAY

He’s a billionaire (though maybe not as rich as he says). He claims he hates debt (but his casino companies went bust ­because of it). He craves press ­attention (but sues at the drop of a hat). What does Trump’s record tell us about how he’ll lead?

Donald Trump’s pitch is simple: He is, as he’ll happily tell you, one of the world’s elite businessmen. Therefore he’d make a great President.

Last June, when Trump famously rode down an escalator inside Trump Tower in Manhattan to announce his presidential candidacy to a crowd padded with paid attendees, he delivered a speech that heavily emphasized his 40-year career as a real estate developer and professional personality. (Although most of the headlines focused on his calling Mexican immigrants “rapists.”)

“We need a leader who wrote The Art of the Deal,” he declared, making sure to mention his bestselling 1987 book. “We need someone who can take the brand of the U.S. and make it great again!”

Then, Trump being Trump, he brandished a financial statement, boasting that he’s worth “well over $10 billion,” and said that the talent for amassing such wealth is “the kind of thinking we need for this country.”

Much to the surprise of the political establishment, a good portion of the voting public appears to have bought that argument. Trump has emerged as an unlikely front-runner for the Republican nomination—becoming the first candidate who has never held political office to lead his party’s polls this late in a campaign since lawyer-turned-utility-executive Wendell Willkie challenged F.D.R. in 1940.

There’s no question that Trump’s perceived business acumen is one of the main drivers of his success. A Bloomberg poll from late last year found that 73% of Republicans think the real estate tycoon “knows how to get things done,” besting all rivals on that measure by a wide margin.

But what sort of businessperson is Trump, really? Though he’s been in the public eye for decades, the 69-year-old is arguably better known today for playing an executive on television than for being one in real life. The already famous Trump gained über-celebrity status from his starring role as the host of the reality series The Apprentice and The Celebrity Apprentice for 14 seasons between 2004 and 2015.

Read more Fortune coverage of Trump’s business career:
The Donald Trump Fortune Interview Complete Transcript
What Trump Does Have to Teach Leaders
Donald Trump on Atlantic City, China, and Sanders
Here’s What You Need to Know About Trump’s Business Failures (Video)
Why Donald Trump Loves Low Interest Rates, But Won’t Reappoint Janet Yellen
Why Donald Trump and Bernie Sanders Are More Similar Than You Think

The picture is further obscured by Trump’s obsession with promoting his own mystique and the magic of the Donald Trump brand. That has helped lead him to lend his name to a series of questionable ventures, which have been duly ridiculed, including by the last Republican presidential nominee. “And whatever happened to Trump Airlines? How about Trump University?” said Mitt Romney in a speech excoriating Trump in March. “And then there’s Trump Magazine and Trump Vodka and Trump Steaks and Trump Mortgage. A business genius he is not.”

Whatever you think of Trump, the fact is that he’s shown remarkable resilience in his decades-long career—scraping the depths at times before rising to become richer than he’s ever been. (And then inflating his wealth publicly to make it seem bigger still.)

How did Trump amass that fortune? In the end it had little to do with TV paychecks and steak royalties. Rather, it came primarily via the business he grew up in: real estate. A booming market has greatly increased the value of Trump’s key property holdings. He has also profited from an overlooked business in which he thrives—the unglamorous work of overseeing property development and management for other developers. Trump has reaped rich fees in that role on such projects as the current transformation of Washington, D.C.’s historic Old Post Office Building into a luxury hotel, alongside private equity firm Colony Capital. In these ventures, as with his campaign, he keeps his team small and is his own most trusted strategic adviser.

The caricature version of Trump is real. He’s very much the guy who has vowed to force Mexico to pay to build a 50-foot wall on the border. He’s also the man who recently said that women who seek abortions should be subjected to “some form of punishment”—drawing harsh criticism from conservatives and liberals alike. He threw out the idea of a 45% tariff on Chinese imports, then said he would never do it, just threaten it. When he suggested in late March that perhaps Japan should develop nuclear weapons, even unpredictable North Korea was flummoxed—an official called his comments “absurd and illogical.” And yet the cartoon is not the whole story.

As he marches toward his party’s nomination, the best way to assess how Trump will handle the job of President is to look beyond the daily campaign craziness and closely examine the business career he’s using as his résumé. (To read what Trump says about his career and his plans for the economy in his own words, see our interview here.) As the leader of the Free World, how would he lead?

We identified five overriding themes that provide a blueprint for running things the Trump way.


I.

HE ALWAYS COMES FIRST

Donald Trump at the Grand Opening of Taj Mahal Trump in 1990 at the opening of the Trump Taj Mahal Casino in Atlantic City. He promoted the gambling mecca as the “eighth wonder of the world.” Later he sold it to his publicly traded company Trump Hotels.Bettmann—Getty Images

Over his roller-coaster career, a core part of Trump’s decision-making process can be summarized in four words: Trump always comes first. Whatever the deal, Trump must be the star. He routinely values two things above all, even over making money: being the boss and gaining publicity. No one values the Trump brand higher than Trump himself.

The obsession with seeing his name in lights has at times damaged his public shareholders and Trump himself. “He lives to see his name praised in the press,” says a former associate who has worked closely with Trump. “When it comes to choosing between getting more publicity and making good deals, I’d say it’s a tie.”

One notable case in which his ego swamped his judgment occurred in Atlantic City. In mid-1995 he launched a publicly traded holding company, Trump Hotels & Casino Resorts, which originally owned one casino in the gambling haven, the Trump Plaza, then purchased the Trump Taj Mahal and Trump’s Castle. In the process, Trump Hotels piled on massive debt. (More on that later.)

By late 1996, Trump Hotels was struggling, but the company was offered a boost. The Rank Group, owner of the Hard Rock chain, proposed an investment in the Castle that would have helped reverse the declining fortunes at Trump Hotels. Rank, which had just opened a Hard Rock Cafe at the Taj, first discussed purchasing a 50% interest in the Castle for as much as $350 million, valuing the property at $180 million more than Trump paid for it. Rank wanted to rebrand the property simply as the Hard Rock. But at the last minute Trump demanded that his name stay on the property and that it be renamed the Hard Rock at Trump’s Marina. Rank walked, and the stock price of Trump Hotels continued to dive. Trump told Fortune that he remembers nothing about any negotiations with Rank.

“When it comes to choosing between getting more publicity and making good deals, I’d say it’s a tie,” says a former associate.

Trump never likes to sell properties. But he especially hates parting with a building that has his name emblazoned on it. Consider this episode. In 1994, Trump escaped a crippling debt load by selling Riverside South, a huge development site along the Hudson River, to a group from Hong Kong. He managed to keep a 30% stake in the partnership. Over the next decade he oversaw the construction of several Trump-branded apartment towers, with plans for his logo to be spread over a big stretch of western Manhattan. But in 2005 his partners—who had the controlling stake—decided to sell and use the proceeds to purchase two skyscrapers that didn’t carry the Trump name: 1290 Avenue of the Americas in Manhattan and 555 California Street in San Francisco.

Trump hated the deal and sued his partners to block it. He argued that the development, bearing the Trump name, was worth about $1 billion more than the price his partners had agreed on. But ironically he later ended up profiting hugely from the transaction. In 2007, Vornado Realty Trust bought out his partners at a price that valued the two buildings at almost $2.6 billion. Trump stayed in the partnership and has seen the value of his stake soar.


II.

HE WANTS YOU TO KNOW HOW RICH HE IS

TRUMP_HOLDINGS_010_WEB

One of Trump’s favorite topics is his own net worth, and he’s not satisfied to let the numbers speak for themselves. Much has been made of his statement, under oath in a deposition some years ago, that his own calculation of his wealth changes depending on “how he feels” that day.

One thing that Trump hasn’t felt like doing is release his tax returns, so we can’t know everything about his money. But we have enough information to conclude this: Trump is exaggerating the size of his empire.

On July 15, 2015, Trump filed a personal financial disclosure (PFD) with the Federal Election Commission. The press release that accompanied the disclosure document stated that “as of this date, Mr. Trump’s net worth is in excess of TEN BILLION DOLLARS.” (The capitalization is his.) The release also declared that Trump’s income for 2014 was $362 million, “which does not include dividends, capital gains, rents, and royalties.”

But a close reading of the 92-page document shows that the items that make up that $362 million are actually Trump’s revenues, not his income (which would factor in expenses).

That doesn’t imply that Trump is hiding anything, although you would think that a successful businessman would know the difference between revenue and income. Most of the evidence is right there in the filing. But on the basis of his known revenues, it’s not plausible that his net worth is $10 billion or more.

To see why, let’s get into the details. The $362 million figure includes 2014 revenues in 15 buckets—from condo sales to golf ­courses and resorts. The trickiest category is rents, because the information he discloses is incomplete. For smaller properties he reports a range. Let’s grant him the high end, which yields a figure of $46 million. For his bigger buildings, we estimate his total rent at about $130 million a year, based on prevailing rates per square foot. Add up that rent, plus the $362 million, and another $37.5 million in royalties (again, a high-end estimate), and we get a total of $576 million in revenues. That’s a lot of money, but it falls short of a $10 billion enterprise.

For perspective, let’s compare Trump’s business to a publicly traded—and therefore transparent—real estate company of roughly the same size. Brandywine Realty Trust, a real estate investment trust that owns more than 179 properties across America, posted revenue of $603 million in 2015—a bit more than our estimate for Trump’s businesses. Today, Brandywine’s market capitalization stands at $2.5 billion.

For more on all things Trump, see here and here.

Naturally, Trump would argue that the magic of his brand gives him a boost. So let’s assume that Trump’s cachet lifts his operating margins to an industry-best 30%, or well above Brandywine’s 20%. Let’s grant Trump some other generous assumptions—for instance, that he earns a healthy 10% on his $302 million securities portfolio. Factor it all in—and subtract an estimated $40 million a year in interest payments—and Fortune ends up with a pretax income estimate of $166 million. If we assume Trump’s businesses are worth 20 times earnings, his empire would be worth about $3.3 billion, or one-third of what he says. (In the chart above, we separately analyzed the values of each of Trump’s holdings and got a higher figure of $3.72 billion. Either way, the total is well short of $10 billion.)

Trump has long used his well-known wealth as a negotiating tool. When creditors threatened to foreclose on him in the early 1990s, Trump claimed his name had such power that taking it off buildings would gravely damage their value. And the tactic worked.

When Fortune contacted Trump with our estimate of his wealth, he called to set the record straight. Our income figure is way too low, he insists. “The $166 mil­lion is peanuts compared to the real number,” says Trump. He says that since he runs a private company, “we don’t disclose these things,” but that the “real numbers” are four times that big. Boasts the Donald: “We have 121 licensing deals under negotiation all over the world and the hottest brand anywhere in the world.”

Trump concluded: “Fortune has no idea what my assets are or the value of these assets. Nor do they understand or know my cash flow or the many successful transactions that make up my cash flow. Fortune has totally lost its way.”


III.

HE SUES FIRST, ASKS QUESTIONS LATER

When Trump reads this, will he threaten a lawsuit? It wouldn’t be surprising. In 1984 he sued a Chicago Tribune architecture critic for $500 million after the writer criticized Trump’s plan to build a skyscraper in lower Manhattan. (The case was dismissed.) In 2006, Trump sued Tim O’Brien, author of TrumpNation, for $5 billion for suggesting that Trump’s net worth was lower than he claimed. (An appeals court later ruled for O’Brien.)

It’s a pattern that goes way back. In 1973, Trump, then 27, moved from Queens, where he grew up, across the East River to the glitz and glory of Manhattan. He joined an exclusive East Side nightclub called Le Club, where he soon met and befriended the notorious lawyer, power broker, and fixer Roy Cohn. A red- and gay-baiter in the 1950s, when he served as chief counsel to Sen. Joseph ­McCarthy, Cohn was famously in-your-face. Cohn was eventually disbarred for fraud and other serious wrongdoing, but not until July 1986, a month before his death, at age 59, from complications of AIDS.

Donald Trump Announces Trump University
Trump, standing in front of a picture of Trump, shows off a Trump book at the launch of Trump University in May 2005.Mario Tama—Getty Images

When Trump Management ran into trouble in 1973, Trump, then president of the company, turned to Cohn. Trump Management, built by Donald’s father, Fred Trump, rented about 14,000 residential units in 39 buildings in Queens, Brooklyn, and Staten Island, according to contemporaneous accounts in the New York Times. In October 1973 the government accused the company of discriminating on the basis of race and color in its rental policies.

Trump denied the ­charges, insisting that the government was trying to force his company to rent to welfare recipients. In December 1973, Cohn filed a $100 million counterclaim—a staggering sum in 1973—against the government for defamation. A federal judge struck the counterclaim just five weeks later. In 1975, Trump settled the suit.

However, Cohn’s shocking 1973 counterclaim—a legally far-fetched, media-grabbing shot over the bow announcing that Trump would spare no expense to impose costs on ­critics—provided a template for attacks, which have become a mainstay of Trump’s business arsenal ever since.

Trump explained the strategy to journalist William D. Cohan in 2013. “When people don’t tell the truth, I go after them,” Trump told Cohan, “even if I’m not going to win. I do it because at least you can inflict pain that way on somebody, in terms of legal fees and other things.”

Trump himself is currently the target of litigation. And out on the stump he has vowed that if elected, he will “open up our libel laws,” effectively overturning the U.S. Supreme Court’s 1964 ruling in New York Times v. Sullivan, which gave the press heightened First Amendment protections against defamation suits for articles about public figures—like Donald Trump.


IV.

HE’S TAKEN ON DEBT RECKLESSLY

Trump claims that as President he would use his business prowess to tackle one of America’s most urgent problems: the skyscraper-high national debt. As evidence, he claims that the businesses he runs have “very low debt and tremendous cash flow.” That example, Trump has declared, demonstrates “the kind of thinking this country needs, with $19 trillion in debt, believe me.”

But a close examination of how Trump ran one of America’s biggest gaming enterprises demonstrates an entirely different kind of thinking from the belt-tightening rhetoric he spouts on the campaign trail. In fact, Trump has a record of recklessly piling on debt—with disastrous results.

Trump served as chairman and sometimes CEO of publicly traded Trump Hotels, later renamed Trump Entertainment Resorts, from mid-1995 to its second bankruptcy, in early 2009. Over that period he leveraged his gaming properties to such heights that he gravely impaired their prospects.

When Trump Hotels first went public in 1995, its big holding was a single casino: the Trump Plaza. Early the following year, Trump Hotels bought the Trump Taj Mahal, billed as the “Eighth Wonder of the World,” for $898 million. In the transaction, Trump Hotels took on a lot of really expensive debt—$817 million in junk bond borrowings at 11.25% interest. From the start, the Taj was losing ­money because of its big interest burden. “People will be shocked when they hear the numbers. The numbers are just huge,” said Trump at the time, hyping the merger.

Nordaby and Demidio, of Calvi Electric, remove the letter 'A' from the signage of Trump Plaza Casino in Atlantic City, New Jersey Workers remove letters from a sign on Atlantic City’s Trump Plaza Casino shortly after it shut down in 2014.Mark Makela—Reuters

Trump wasn’t done buying casinos—from Trump. In June 1996 he announced the purchase of another of his casinos, Trump’s Castle. Whereas he’d held just half the equity in the Taj, he owned 100% of the Castle. Trump Hotels agreed to buy the Castle for about $520 million—and Trump gave himself a premium. The announced price was a staggering 18 times cash flow (twice what the Taj had fetched). It’s not even clear the Castle was worth its debt load of over $350 million.

It didn’t take long for the debt to take its toll. When Trump Hotels went public, it had carried just $494 million in long-term debt; by the end of the next year, after the two big purchases, its borrowings had ballooned to $1.7 billion. By 2002, Trump Hotels’ debt was $2.1 billion, and its leverage ratio had expanded to 27, approaching the levels that sank Lehman Brothers during the financial crisis.

From its IPO in 1995 through two separate bankruptcies in 2004 and 2009, Trump Hotels—and its successor, Trump Entertainment—never made money. Year after year its operating profits were decimated by gigantic interest costs. Over the almost 15 years that Trump served as chairman, the casino company posted net losses, excluding extraordinary items, totaling nearly $1.7 billion.


V.

HE THINKS HE’S GREAT AT EVERYTHING

Unlike most real estate titans, Trump has never stuck to real estate. He has frequently attempted to acquire and operate companies in industries outside his expertise. Several executives who worked for Trump, all of whom declined to speak on the record because they fear his wrath, say they were constantly warned by managers who knew him best that “Donald’s ego is so big, he believes he can run anything.”

In the late 1980s, Trump bought the Plaza Hotel and the former Eastern Shuttle (renaming it Trump Shuttle), then lost both businesses to excessive debt and weak management. He also led abortive takeovers of Bally and American Airlines. His buccaneering style was especially misplaced in gambling, an industry that’s extremely cyclical. While his rival Steve Wynn stuck to gaming and retrenched when he anticipated downturns, Trump never thought Atlantic City would do anything but boom—failing to foresee the threat from the spread of gaming to neighboring states.

The same approach is evident in Trump’s latest quest in politics. He clearly thinks he’s not just the best candidate for the job but also the best at running a major presidential campaign. “I’m the strategist,” he recently bragged to New York magazine, explaining that he has been the architect of his unorthodox campaign and unexpected political success. Once again, though, Trump might not know quite as much as he thinks he does. Pundits are predicting that his ineptitude in the intricacies of the process—especially in securing delegates—could potentially cost him the nomination at the Republican convention. Then Trump could go back to the business of being Trump full-time.

A version of this article appears in the May 1, 2016 issue of Fortune.

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